BOAD Secures Record $500M Hybrid Bond

Monday, 10th February 2025

By inAfrika Correspondent

The West African Development Bank (BOAD) has broken new ground in financial innovation with its successful issuance of a $500 million public sustainable hybrid bond on international capital markets. This deeply subordinated instrument, rated Baa3 by Moody’s and recognized with 50% equity content by both Moody’s and Fitch, carries a 30-year maturity with a five-year non-call period at an equivalent EUR coupon rate of 5.9%. Robust investor confidence tightened pricing by 37.5 basis points from the initial level and produced an exceptional $1.9 billion order book, leading to a final oversubscription of 3.4 times.

The remarkable response underscores BOAD’s strong credit profile and the structure’s unique features, attracting a geographically diverse range of investors: 44% from the UK, 20% from Switzerland, 13% from the United States, 3% from the Middle East, 2% from Asia, and 19% from the rest of Europe. By investor type, asset managers represented 69% of allocations, followed by hedge funds at 20%, banks/private banks at 6%, and pension funds/insurance companies at 5%.

Before this inaugural public issuance, BOAD had already secured $204 million in private placements from the Arab Bank for Economic Development in Africa (BADEA) in December 2023 and from Cassa Depositi e Prestiti (CDP) in August 2024. With this success, BOAD has nearly reached its $600 million hybrid bond objective while advancing its Djoliba Strategic Plan, as the new capital infusion increases the Bank’s equity-to-assets ratio to 41.7% and achieves 95% of its overall capital increase goal.

Proceeds from the issuance will be allocated to financing or refinancing eligible Green and Social projects under BOAD’s Sustainability Bond Framework, reflecting the Bank’s unwavering commitment to environmental stewardship and social progress throughout the West African Economic and Monetary Union (WAEMU) region.

BOAD President & Chairman of the Board, Mr. Serge Ekué, hailed the transaction as a testament to investor trust and the Bank’s focus on innovation, emphasizing that the funds raised will strengthen BOAD’s capacity to finance transformative projects across its member countries. As the common development finance institution of the WAMU, BOAD remains at the forefront of efforts to drive regional economic integration, sustainable growth, and enhanced living standards across West Africa.